SEC charges day-trading site operator with fraud
By Reuters
Special to CNET News.com
March 20, 2000, 3:25 p.m. PT
Securities regulators today said they filed and settled civil fraud charges against the operator of a Web site that falsely claimed subscribers could view and mimic the real-time trades of a successful day trader.
The Securities and Exchange Commission charged David A. Rudnick of Cumberland Foreside, Maine, and his firm, DynamicDaytrader, with violating federal antifraud provisions by posting bogus statements on the site.
The supposed trades made by the site's day trader were not real, and the prices at which the "trades" were made were either fictitious or not available to the general public, the SEC said. The site claimed the head trader earned a return of more than 747 percent in 1999.
"He never made the trades. It was all hypothetical," said James Adelman, the SEC's associate district administrator.
Although Rudnick was not a licensed investment adviser, the SEC charged him with violating general and investment adviser antifraud provisions based on his conduct.
Rudnick, 36, who neither admitted nor denied the SEC's allegations, agreed to repay $40,107 in subscription revenues, plus prejudgment interest, and faces a $15,000 civil penalty against his firm. Rudnick voluntarily shut down the site in February, Adelman said.
Between January 1998 and February 2000, Rudnick's firm had some 315 subscribers in 38 states and 13 countries, some who paid $250 a year for the service, the SEC said. |
